On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the first payment on the note on December 31, Year 1 is:
A. Debit Notes Payable $14,238; credit Cash $14,238.
B. Debit Notes Payable $10,000; debit Interest Expense $4,238; credit Cash $14,238.
C. Debit Interest Expense $7,000; debit Notes Payable $7,238; credit Cash $14,238.
D. Debit Notes Payable $7,000; debit Interest Expense $7,238; credit Cash $14,238.
E. Debit Notes Payable $10,000; debit Interest Expense $7,000; credit Cash $17,000.
Answer: C
You might also like to view...
Disclosing personal information about oneself is often a cultural factor.
Answer the following statement true (T) or false (F)
Harkin Company purchased a building on a tract of land and allocated the entire cost of the purchase to building. Normally it depreciates buildings over 20 years using the straight-line method with zero residual value and does not depreciate land. Because of its accounting treatment of the purchase, Harkin's income before taxes for the next 20 years will be
a. overstated. b. understated. c. unaffected. d. in conformance with GAAP.
The life expectancy of a particular brand of tire is normally distributed with a mean of 40,000 and a standard deviation of 5,000 miles. What is the probability that a randomly selected tire will have a life of exactly 47,500 miles?
a. .4332 b. .9332 c. .0668 d. 0
An organization engaging in strategic entrepreneurship focuses on identifying opportunities that it can exploit through innovations.
Answer the following statement true (T) or false (F)